PPP will not address water crisis, contrary to ADB claim

October 15, 2010

Press statement

Experience of countries around the world that have implemented water privatization shows that public-private partnership (PPP) will not address the water crisis. Contrary to the claim of the Asian Development Bank (ADB), allowing profit-oriented private corporations to take over the management and distribution of water resources will even worsen the problem.

Advocacy group Water for the People Network (WPN) issued the statement as the ADB wraps up today its five-day conference “Water crisis and choices” in its Manila headquarters.

The ADB warned during the conference that Asia will face a severe water crisis by 2030, with the shortfall in water supply reaching as much as 40 percent. To address the situation, the multilateral financial institution is drawing up a new framework for water operations that calls for efficiency improvement and greater PPPs.

It is ironic that in justifying its renewed push for water privatization, the ADB cited the Philippines as the “best example so far in the region” in terms of PPP initiatives in the water sector. The ADB was referring to the privatization of the Metropolitan Waterworks and Sewerage System (MWSS) in 1997 that transferred to private concessionaires Manila Water and Maynilad the task of delivering water to almost 14 million people in Metro Manila and nearby areas.

The WPN reminded the ADB that just a few months ago, almost half of Metro Manila suffered from water shortage and thousands of residents had to endure long queues and water rationing. While the authorities blamed the low water level at Angat Dam, which supplies 97 percent of domestic water needs of the metropolis, the impact would not have been as bad if not for structural issues related to the privatization of the MWSS almost 13 years ago.

For instance, even prior to the water shortage, only 60 percent of 760,000 households in the service area of Maynilad have 24-hour water supply and more than half of its water allocation are wasted due to leaking pipes and pilferage. Manila Water, on the other hand, claims 99-percent coverage but this includes those serviced by a third party private contractor often in the poor communities. These private companies promised universal access to water by 2001 and a 24/7 water supply.

The advocacy group warned that promoting more PPPs in the water sector will aggravate the deteriorating condition of the world’s water supply. It added that instead of “water for all” as trumpeted by the ADB, dwindling water resources will be increasingly monopolized by the rich at the expense of the poor who could not afford escalating user fees common in PPP projects.

Reiterating its call to stop the privatization and corporate takeover of water services and resources, the WPN said that the public sector is still in the better position to deal with the worsening water supply problem facing the world because of its inherent mandate to deliver public goods and services such as water. #